Salary Deferral Plan
for
Selected Employees of AlliedSignal Inc. and its Affiliates
(Career Band 6 and Above or Employees Who Occupy Positions
Equivalent Thereto)
Amended and Restated
as of January 1, 1995
1. Eligibility
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Those employees of AlliedSignal Inc. (the "Corporation") and
its affiliates whose positions are evaluated in Career Band 6 and
above or who occupy positions equivalent thereto and who are
designated by the Management Development and Compensation
Committee (the "Committee"), shall be eligible to participate in
this supplemental non-qualified Salary Deferral Plan for Selected
Employees of AlliedSignal Inc. and its Affiliates (Career Band 6
and Above or Employees Who Occupy Positions Equivalent Thereto)
(the "Plan").
2. Participation
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An eligible employee may become a participant in the Plan (a
"Participant") by filing a timely written deferral election with
the Corporation. Such notice shall direct that a portion of the
compensation elements described in paragraph 3(a) and paragraph
3(b) be credited to an unfunded deferred compensation account
maintained for the Participant under the Plan (the "Participant
Account" or "Account"). A Participant's direction shall become
effective for the pay period or payment date in the next
succeeding calendar year (or for a newly eligible Participant, for
the next succeeding pay period or payment date after the receipt
of the direction by the Corporation), and shall continue in effect
until the Participant terminates such direction, effective as of
the end of the calendar year, or is no longer eligible to be a
Participant. Any modification of Participant's direction shall be
effective only with respect to compensation payable with respect
to pay periods in the calendar year next following the date such
direction is received by the Corporation.
3. Contributions to Participant Accounts
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(a) Base Annual Salary A Participant may, prior to the
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beginning of any calendar year (and with respect to a newly
eligible Participant, within thirty days after first becoming so
eligible) elect to defer an aggregate amount of base annual salary
otherwise payable in such subsequent calendar year ( or with
respect to a newly eligible Participant, in the remainder of the
calendar year), exclusive of any bonus or any other compensation
or allowance paid or payable by the Corporation or its affiliates
(the "Base Annual Salary"). The amount deferred under this
paragraph 3(a) shall not be greater than fifty percent (50%) of
the Participant's Base Annual Salary for such pay period.
(b) Incentive Awards A Participant may, to the extent that
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the AlliedSignal Inc. Incentive Compensation Plan For Executive
Employees (the "Incentive Plan") permits deferrals of an incentive
award (the "Incentive Award") payable thereunder, elect to defer
an amount not greater than one hundred percent of such Incentive
Award. Any amount so deferred shall be deemed to be deferred
under this Plan but shall, to the extent the provisions of the
Incentive Plan are not inconsistent with this Plan, otherwise be
subject to the terms of the Incentive Plan. Any deferral of an
Incentive Award shall be made by filing an appropriate written
deferral election with the Corporation not later than ninety days
prior to the end of the performance period with respect to which
the Incentive Award is payable.
(c) Deferral Amounts All amounts determined under this
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paragraph 3 which are the subject of a written deferral election
(the "Deferral Amounts") shall, in accordance with the relevant
Participant direction, be credited to a Participant Account
maintained under the Plan on the same day the Base Annual Salary
or Incentive Award would otherwise have been payable.
4. Deferral Requirements
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Amounts may be deferred under this Plan for a minimum period
of three years. Except as otherwise provided in paragraph 9, no
amount shall be withdrawn from a Participant Account prior to the
earlier of: three years following the last day of the calendar
year in which the amount is credited to the Participant Account;
the date the Participant reaches normal retirement age and is
eligible to receive a benefit under a pension plan of the
Corporation or one of its affiliates; the date of Participant's
death; or the date the Participant ceases to be employed by the
Corporation or any of its affiliates.
5. Interest Equivalents
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Deferral Amounts shall accrue additional amounts equivalent
to interest ("Interest Equivalents"), compounded daily, from the
date the Deferral Amount is credited to the Account to the date of
distribution. A single rate for calculating Interest Equivalents
shall be established by the Committee, in its sole discretion, for
all Deferral Amounts credited to Participant Accounts in each
calendar year. The rate established by the Committee shall not
exceed the greater of (i) 10% or (ii) 200% of the 10-year U.S.
Treasury Bond rate at the time of determination. Such Interest
Equivalents, once established for a calendar year, shall remain in
effect with respect to Deferral Amounts credited to Participant
Accounts during that calendar year until the Deferral Amounts are
distributed.
6. Participant Accounts
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All amounts credited to a Participant's Account pursuant to
paragraphs 3 and 4 shall be unfunded general obligations of the
Corporation, and no Participant shall have any claim to or
security interest in any asset of the Corporation on account
thereof.
7. Distribution from Accounts
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At the time a Participant makes an election pursuant to
paragraph 3, the Participant shall also make an election with
respect to the distribution of the Deferral Amounts and Interest
Equivalents accrued thereon which are credited to the
Participant's Account pursuant to such election. A Participant
may elect to receive such distribution in one lump-sum payment or
in a number of approximately equal annual payments (provided the
payment period may not include more than fifteen such
installments). The lump-sum or the first installment shall be
paid as soon as practicable during the month of January of the
calendar year designated by the Participant. Except as otherwise
provided in paragraphs 8, 9 and 10, all installment payments
following the initial installment payment shall be paid in cash as
soon as practicable during the month of January of each succeeding
calendar year until the entire amount in the Account shall have
been paid.
8. Distribution on Death
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If a Participant should die before all amounts credited to
the Participant's Account have been distributed, the balance in
the Account shall be paid as soon as practical thereafter to the
beneficiary designated in writing by the Participant. Payments to
a beneficiary pursuant to a designation by a
Participant shall be in such form as the Participant shall elect,
including periodic payments as described in paragraph 7, but in the absence
of any such election, the payment shall be made in one lump sum to the
designated beneficiary as soon as practicable following the death
of the Participant. Such beneficiary designations shall be
effective when received by the Corporation, and shall remain in
effect until rescinded or modified by the Participant by an
appropriate written direction. If no beneficiary is properly
designated by the Participant or if the designated beneficiary
shall have predeceased the Participant, such balance in the
Account shall be paid to the estate of the Participant.
9. Payment in the Event of Hardship
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Upon receipt of a request from a Participant or a
Participant's designated beneficiary, delivered in writing to the
Corporation along with a Certificate of Unavailability of Other
Resources form, the Committee, the Senior Vice President - Human
Resources and Communications, or his designee, may cause the
Corporation to accelerate (or require the subsidiary of the
Corporation which employs or employed the Participant to
accelerate) payment of all or any part of the Deferral Amount and
Interest Equivalents credited to the Participant's Account, if it
finds in its sole discretion that payment of such amounts in
accordance with the Participant's prior election under paragraph 3
would result in hardship to the Participant or beneficiary and
such hardship is the result of an unforeseeable emergency caused
by circumstances beyond the control of the Participant or
beneficiary. Acceleration of payment may not be made under this
paragraph 8 to the extent that such hardship is or may be relieved
(i) through reimbursement or compensation by insurance or
otherwise, (ii) by liquidation of the Participant's assets, to the
extent the liquidation of assets would not itself cause severe
financial hardship or (iii) by cessation of deferrals under this
Plan or any tax-qualified savings plan of the Corporation.
10. Change in Control
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(a) Initial Lump Sum Election Notwithstanding any election
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made pursuant to paragraph 7, a Participant may file a written
election with the Corporation to have the Deferral Amounts and
Interest Equivalents accrued thereon which are credited thereafter
to the Participant's Account paid in one lump-sum payment as soon
as practicable following a Change in Control, but in no event
later than 90 days after such Change in Control.
(b) Revocation of Lump-Sum Election A Participant may
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revoke an election made pursuant to paragraph 10(a) by filing an
appropriate written notice with the Corporation. A revocation
notice filed pursuant to this paragraph 10(b) shall be effective
with respect to Deferral Amounts and Interest Equivalents accrued
thereon which are credited thereafter to the Participant's
Account.
(c) Limitation on Elections Any election made pursuant to
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paragraphs 10(a) or 10(b) shall not be effective unless filed with
the Corporation at least 90 days prior to a Change in Control.
(d) Definition of Change in Control For purposes of the
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Plan, a Change in Control is deemed to occur at the time (i) when
any entity, person or group (other than the Corporation, any
subsidiary or savings, pension or other benefit plan for the
benefit of employees of the Corporation
or its subsidiaries) which theretofore beneficially owned less than 30%
of the Corporation's common stock (the "Common Stock") then outstanding,
acquires shares of Common Stock in a transaction or a series of
transactions that results in such entity, person or group directly
or indirectly owning beneficially 30% or more of the outstanding
Common Stock, (ii) of the purchase of Common Stock pursuant to a
tender offer or exchange offer (other than an offer by the
Corporation) for all, or any part of, the Common Stock, (iii) of a
merger in which the Corporation will not survive as an
independent, publicly owned corporation, a consolidation, a sale,
exchange or other disposition of all or substantially all of the
Corporation's assets, (iv) of a substantial change in the
composition of the Board during any period of two consecutive
years such that individuals who at the beginning of such period
were members of the Board cease for any reason to constitute at
least a majority thereof, unless the election, or the nomination
for election by the shareowners of the Corporation, of each new
director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning
of the period, or (v) of any transaction or other event which the
Committee, in its sole discretion, determines to be a Change in
Control for purposes of the Plan.
10. Miscellaneous
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(a) No Alienation of Benefits Except insofar as may
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otherwise be required by law, no amount payable at any time under
the Plan shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge, or encumbrance of any kind nor in any manner
be subject to the debts or liabilities of any person and any
attempt to so alienate or subject any such amount, whether
presently or thereafter payable, shall be void. If any person
shall attempt to, or shall alienate, sell, transfer, assign,
pledge, attach, charge, or otherwise encumber any amount payable
under the Plan, or any part thereof, or if by reason of such
person's bankruptcy or other event happening at any such time such
amount would be made subject to the person's debts or liabilities
or would otherwise not be enjoyed by that person, then the
Corporation, if it so elects, may direct that such amount be
withheld and that same or any part thereof be paid or applied to
or for the benefit of such person, the person's spouse, children
or other dependents, or any of them, in such manner and proportion
as the Corporation may deem proper.
(b) No Right or Interest in Corporation's Assets Neither
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the Corporation nor any of its Affiliates shall be required to
reserve or otherwise set aside funds for the payment of
obligations arising under this Plan. The Corporation may, in its
sole discretion, establish funds, segregate assets or take such
other action as it shall determine necessary or appropriate to
secure the payment of its obligations arising under this Plan.
This Plan is intended to be unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act
of 1974, as amended. Nothing contained herein, and no action taken
pursuant to the provisions of this Plan shall create or be
construed to create a trust of any kind, or a fiduciary
relationship between the Corporation and any Participant or any
other person. To the extent that any person acquires a right to
receive payments under this Plan, such right shall be no greater
than the right of an unsecured creditor of the Corporation.
(c) Administration The Corporation shall have sole
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discretion and authority to administer the Plan, including the
authority to interpret its terms, promulgate regulations
thereunder, determine eligibility to participate in the Plan and
make any finding of fact which may be necessary to determine the
obligation of the Plan with respect to the payment of benefits.
(d) Amendment The Corporation may amend, modify or
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terminate the Plan at any time, or from time to time; provided,
however, that no change to the Plan shall impair the right of any
Participant with respect to amounts then credited to an Account.
(e) Accounting Each Participant shall receive periodic
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statements (not less frequently than annually) setting forth the
cumulative Deferral Amounts and Interest Equivalents credited to,
and any distributions from, the Participant's Account.
(f) Facility of Payments If the Corporation shall find that
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any person to whom any amount is payable under the plan is unable
to care for his or her affairs because of illness or accident, or
is a minor, or has died, then any payment due the person or the
person's estate (unless a prior claim therefor has been made by a
duly appointed legal representative), may, if the Corporation so
elects in its sole discretion, be paid to the person's spouse, a
child, a relative, an institution having custody of such person,
or any other person deemed by the Corporation to be a proper
recipient on behalf of such person otherwise entitled to payment.
Any such payment shall be a complete discharge of the liability of
the Corporation and the Plan therefor.
(g) Governing Law The Plan is intended to constitute an
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unfunded deferred compensation arrangement for a select group of
management or highly compensated personnel and all rights
thereunder shall be governed by and construed in accordance with
the laws of New York.